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Culture: Government Payment Centered to Private Customers Centered

In the adult day services arena, which consists of programs alternately described as social or medical model, adult day center, adult day health, or adult day care. It tends to be center based. In the United States there are approximately 5,000 centers. Center providers received compensation from families pay out of pocket (including long-term care and life insurance products, and loans), through grants and community fundraising, and through government payment sources such as Medicaid, the Veteran’s Administration, and other state and federal programs such as the Older American Act and the USDA’s Child and Adult Care Food Program.

Government payment sources are by far the most significant source of funding for adult day services. How does this affect the company’s culture? First, many of the government payment sources also have significant case management program in place with sophisticated intake and referral processes. Consequently, the customer becomes the case management system rather than the individual client. The center tries mightily to serve the participant and her family, yet the case manager is the one who has to be pleased: nurses and staff drop everything to take their calls; the case management care plans form the foundation of the center care plan so the center doesn’t get cited and lose money in recoupment; and significant energy is expanded to ensure documentation compliance rather than excellent care. The payments tend not to move up for years at a time (if not decades), so there is constant pressure towards cost cutting rather than staff and program improvement. The pressure is intense to have a culture responsive to mandates and regulatory compliance.

In Georgia, I’m seeing resistance from Centers. In some cases, programs are simply closing in response to the increasing costs, increasing regulatory requirements as it has become difficult to develop a viable business model. Others are bucking the system. For one non-profit, they decided to drop their participation in Medicaid and government payment programs. They had the ability to continue serving their existing Medicaid clients because they were able to raise money and they found significant savings when they focused on what they valued rather than regulatory compliance. Other centers have announced that they will no longer take new government payment clients.

This appears to be the change that most programs must adopt to become healthier businesses with reasonably levels of profitability.

The change is not easy. In conversations with NADSA members, this goal as proved elusive. Much money has been spent developing beautiful, upgraded physical plants; yet, the needle hasn’t been moved. They find competition from assisted living, in home care, nursing homes, and other senior care providers. It’s difficult to be successful in that market, because it is easy to become dependent on the sophisticated case management referrals.

The first change the adult day center has to be in the corporate culture. The culture that succeeds with government payment sources is not the same culture that succeeds with families determined to provide the best care for their loved ones with their own funds. The culture that will Wow the family with sufficient funds to care for their loved one is different. This is a person-centered environment, in which families expose intimate details of their lives as they become care partners with their loved ones. These customers won’t be impressed with a focus on private paying clients simply because the center needs a better source of revenue.

The next few entries will explore the adult day center’s corporate culture. Clearly, it is and must be unique to each organization, but it FEELS key to effort to change.

Let me know how corporate culture of your program impacts your ability serve and attract a healthy mix of customers.